What role should the Government play in promoting entrepreneurship?

Anonymous

November 4th, 2015

I have always questioned what role the government should play in the entrepreneurial world. Do you think government's direction should be around a) Access to Capital such as Grants, Loans for seed capital b) Simplification of their Policies and Procedures c) Public-Private Partnerships d) Create and manage competition by promoting a Public Sector Units e) Help with Diplomatic channels or something beyond?

Fact: The 32-year-old Small Business Innovation Research (SBIR) program, which has awarded out more than 112,500 awards to small businesses, worth more than $26.9 billion, through fiscal year 2009. http://www.biztechmagazine.com/article/2014/09/how-government-funding-small-business-innovation

Fact: Elon Musk's SpaceX and Telsa Motors would not have started if they
had not originally been backed by a government loan
http://www.businessinsider.com/elon-musk-always-depended-government-money-up-front-about-it-2015-6

Fact: The private sector wouldn't invest in 3D printing originally, thinking it was too risky. Only the U.S. government did through Small Business Investment Research (SBIR) grants. http://www.biztechmagazine.com/article/2014/09/how-government-funding-small-business-innovation

Fact: more than 95% of the iPhone's components original came from DARPA
and DoD-backed research (not the private sector). Siri also came from
DARPA investments.
http://thebreakthrough.org/archive/the_iphone_and_the_invisible_h

... so perhaps those that seem think think there's no relationship between government and entrepreneurs might want to review the actual history?

As entrepreneurs, we constantly strive to build a business with viable business models. However, sometimes there may be situations where there is a chicken and egg problem so an industry doesn't get started yet it is strategically important. For example, consider the water industry. Few businesses are created in the United States because the business models are weak or there isn't a solid funding model. However, in Israel, there is significant government support for water start-ups since it is a critical and strategic resource. They are building a strong sector that will benefit Israel and the technology that is developed will be able to be marketed globally.

Anonymous

November 4th, 2015

Great answers. Private enterprise works when there's obvious money to be made, and sometimes when there's non-obvious money to be made.

When the money to be made is long term, it often doesn't make sense for a business.

This is how corporations began. For the first hundred years, the US had no "private corporations". A founding principle of America was that corporations had to be very strictly regulated. The whole Tea Party event that sparked American independence was because of a corporation, the East India Company, and the founders were very aware of its greed and the consequences. So in America, corporations couldn't deviate from their charter, purchase other corporations or own their shares and they couldn't change their name. States would charter a corporation for a specific purpose and specific period of time.

After the civil war, people forgot, and a civil war hero persuaded a state to allow it more freedom. It quickly became a railroad monopoly, the first of many monopolies.

When we want to work together as a city, state or country and provide a service to ourselves, or begin a long-range project, we can do that via government. We've now developed cultural notions that government is not us, and we've bought into that enough to make it true, and today the people have lost control of the federal government and most state governments, and many cities.

So PeopleCount.org has formed to remedy this, and make government, starting with Congress, accountable to people. But few people have been able to understand it, so I'm still working on it alone, and without funding, despite having signed up some customers. You're welcome to help, whether that's to make it understandable or provide funding, or join the team.

Do you want to complain about government, or do something about it?

The proper role of government is to be the embodiment of citizens working together. There are no "shoulds" about it.

Missy, of those five things included in your list, I like B. I believe that less government is always better. When government gets involved usually one of two things happens sometimes both - they either want something (usually some control or over-site) or they slow things down.

Government can never be a leader in entrepreneurship...that's the sole
domain of entrepreneurs. However, government can and should support
entrepreneurs in their quest, while never forgetting that their role is
as a Feeder and not a Leader.

In Canada there are resources
that do a pretty good job of fulfilling this, while also providing
opportunities for coaching services. Working with startups, I've seen
first-hand the benefits of SR&ED tax incentive programs and NRC-IRAP funding that directly support and encourage innovation and R&D.

As
a Board Member of Innovation Island Technology Association, a local
tech incubator operating at arms length with provincial and federal
funding, I see the real and direct positive impact that this type of
government support brings to startups. This includes but is not limited to:

Support in applying for programs mentioned above

Mentorship and coaching (as important as anything else)

Introduction to Angel, VC and other types of capital

There
is a role, but stay away from trying to be entrepreneurs. Governments
are not wired to be entrepreneurial (maybe they shouldn't try too hard
to be such, but that's another debate). When we direct governments to feed - not stifle - entrepreneurial spirit, we all win.

It always amazes me the rhetoric repeated in history. Our Founding Fathers
were listening to the same message nearly 250 years ago. I mention that
because at the time London sent that message, the Colonies were 250 years
old. Same time frame. Same message. What can you do for yourselves that
we can't do for you? That was Parliament's message. It was a time when
England dominated the world. As for our Founding Fathers they were English
citizens, not Americans. We need a Second Generation of Founding Fathers
to curb the rhetoric of today. Men and women from Main Street ... Fort
Wayne, IN, Cedar Rapids, IA and Cheyenne, WY ... not professional
politicians and their minions. Which is exactly what entrepreneurs need. A
clean slate to move forward. History has proven that democracies last no
more than 300 years. I won't be here, but in your lifetime, you can expect
a great change in our country. It won't be a "little revolution now and
then" as Thomas Jefferson alluded to, but it will be close. An economic
revolution to be sure.

The government is an important enabler of innovation and entrepreneurship in every ecosystem, providing the robust regulatory environment and building the infrastructure, community, talent and mindset for innovation and entrepreneurship to thrive. From my view as an entrepreneur and role in leading the Infocomm Investments’ fund, the Singapore government’s support has been crucial in jump-starting the start-up ecosystem and helping start-ups to grow.

TheSmart Nationvision launched by the Prime Minister of Singapore will see the government pulling all the key stakeholders of an ecosystem - big corporates, start-ups, risk capital, researchers and academics - together to tackle important shared global challenges arising from the inevitable realities of an ageing population and urban density. Especially in areas ranging from tele-healthcare to self-driving vehicles, global tech builders can use Singapore as their living lab to pilot some of these exciting innovations.

Happy to share some of the government efforts in response to the areas listed by Missy, using Singapore as the case study.

Access to Capital

Singapore has rolled out a series of funding schemes to help start-ups at different stages of growth. These grants are useful in helping start-ups to grow, build their solution and access markets, while stretching their runway to succeed. To complement these schemes, the government also actively connects start-ups with mentors and plug them into networks to help them grow.

Regulations can make or break a start-up. In this aspect, Singapore has been forward looking in clearing the way for innovations to happen, and yet measured so that the associated risk can be managed.

The fintech area which is all the rage right now, is a good example. Fintech solutions such as P2P money transfer and crowdfunding can be exciting, but they also carry risks - e.g. breach of sensitive data and scams/ loss of investment through unregulated funding. Nevertheless, the government has been very open to provide a conducive regulatory environment for these innovations to be developed. The government has adjusted its policies to allow financial institutions to launch new ideas without needing its endorsement so long the institutions’ internal due diligence are met. Another initiative has been in rolling out “sandboxes” where innovative solutions can be launched and tested within controlled boundaries. The intention is to create a safe space for innovation so that consequences of failure can be contained.

The signal from the government has been encouraging, and we see more fintech start-ups coming up, and financial institutions being active in driving innovation. Already, the Singapore banks, DBS and UOB, have partnered Infocomm Investments to launch their own accelerators at the one-stop start-up facility BASH, and we can expect more fintech start-ups and solutions to come through these programme.

Public Private Partnership

The Singapore government has also proactively engaged the private sector, particularly in co-investments to open up start-ups’ access to smart money, and tap on the private sector to take the lead on investments.

SEEDS - Government co-invest 1-1 with third party investors into start-ups (seed/ early).

TIS - Government invests up to 85% into the start-up (early) with the remaining invested by selected private technology incubator.

SSA - Government co-invest 1-1 with selected accelerators, targeting strategic and nascent verticals such as medtech and clean tech.

ESVF - Government co-invest with selected VCs into start-ups (typically series A and above); S$60M public funds for co-investment.

Big corporates also play an important role in a successful innovation and entrepreneurial ecosystem. The government has encouraged big corporates to work with start-ups to come up with new ways to disrupt existing traditional business models, or even set up their own innovation labs or ventures. Big corporates also help with building young tech talent and capabilities in Singapore, through partnership with the government e.g. Microsoft partnered with IDA through the “Code for Change” programme to develop computational thinking skills in up to 1.2 million individuals, of whom up to 500,000 will be young people.

Create and Manage Competition

It can be tough for start-ups to get noticed and compete for contracts. To give young and promising start-ups a boost, the Infocomm Development Authority (IDA) is providing start-ups with accreditation through an independent third-parties evaluation of the companies. Accredited start-ups will gain more opportunities for their solutions to be showcased and eventually be considered first for government and large enterprises projects. Just in the first year of its running, these start-ups had access to about S$20 million worth of projects, including 125 projects from 50 government agencies. Such efforts help to position start-ups to win projects for traction/ growth.

Overseas Channels

Lastly, Singapore has been establishing itself as a node on the global network as as start-ups increasingly take on a regional/ global view of their market. In regions where markets and cultures are fragmented (e.g. Asia), the usefulness of such overseas channels cannot be understated. Infocomm Investments has been successful in this area with its strong regional networks (e.g. APICTA) that links it with 15 countries in APAC. Global start-ups planning to enter Asia can join the upcoming start-up exchange programme to locate in Singapore for a period of time and build inroads to overseas regional markets. Likewise, local start-ups venturing into the US and Europe, can tap on Infocomm Investments offices in San Francisco and London, and its overseas partners to expand overseas.

Start-ups looking to grow in Singapore/ Asia can go to Clinic@BASH for advice or touch base with Infocomm Investment to keep abreast about the latest community happenings.

Neil HereWeAre
Want To find-close Business Online without competition Before They Google Search? We solve this problem 1(508)-481-8567

November 4th, 2015

We always have a lot of legalese and regulatory, licensing, permitting, etc hoops to jump through that, in the course of trying to get a business from scratch into solid and profitable can stifle the entire initiative.

Thats where government can help - simply lessen all of that.

For instance, maybe delay various requirements, permits, the hoops now in place until the business is clearly at a point of what becomes a defined income. That way, we dont stifle the entrepreneur from starting up and we we dont derail it as it tries to become a viable business.

Frankly, Even when we become solid that stuff gets in the way.

Then there's which level of government to reel in and get off our case so to speak? Local, State, County, Feds - they all have a web of obstacles they often call oversight, permits or licensing where your business initiative can be stopped cold.

Neil HereWeAre
Want To find-close Business Online without competition Before They Google Search? We solve this problem 1(508)-481-8567

November 6th, 2015

Maybe the question should be "how can we small/medium sized businesses organize together to exert pressure on government to do what we need?